glad you could join us. the fed tear powell tells the market to hold your horses, we are not ready to start cutting interest rates. we will dig into the details of the beige book which is out to now. >> another bombshell report on the problems of ai, the microsoft copilot designer creating questions of violence or sexualization, we will hear more and see what microsoft is saying and doing. first, a check on the markets as stocks are rebounding falling yesterday's losses. we have averages in positive territories with the nasdaq leading the way, s&p up by .5% and the dow adding .2%. we are watching shares of new york community bank, the stock has halted after losing half of its value on reports where it is seeking a cash infusion. much more on this, coming up, let's get to the big market

story of the day, congressional testimony from j powell. >> the fed chair j powell maintains the economy is in good shape, labor market is strong with inflation coming down but the fed needs more evidence on inflation coming down before cutting interest. how much evidence? maybe is not as much as we previously thought. >> more evidence that ill give us more confidence that inflation is on a path down o 2% sustainably. not looking for better readings then we have had, but more of them and what will happen is as we go forward, 12 months will continue to drop. because it will be lower than early last year. >> the first of two days of testimony before congress j powell says the fed can cut before it reaches 2% , he does not believe the economy is close to recession and higher bank capital rules could be re-

examined. he says it is possible before it goes to capital higher levels being withdrawn, they could be reproposed on commercial real estate. there will be losses, it is a serious problem, but most issues are with small and medium banks in specific locations and the fed is working with the banks. add it all up, some modest but measurable increase in the probability of rate cuts seen as a longshot now, the future market maintains the bet on june for the first cut. >> okay, hang in there. we will come back to you in a minute after you have time to digest the beige book. for more on testimony from j powell and if the rebound is sustainable, let's bring in chief investment officer and senior portfolio editor at northstar asset management. welcome back. how concerning are the developments today out of new york community bank having potentially to raise the cap? >> it is very unfortunate.

we see the banks with a crisis of confidence and it does impact the small businesses, people on the street who have these relationships with the banks. so it is unfortunate. in terms of this spilling into systemic problems, chairman powell talked about closely monitoring by the supervisors all across the country. this is a crisis that will play out over a number of years. but, not sure at this point if it becomes a full-blown crisis. i think the fed will be watching closely how and if it spills and starts impacting smaller businesses to a bigger degree. >> let's pivot to interest rates and what the fed chair said today. apart from the fact, it seems like what he said is what we knew which is they will not be interest rate cuts in march or may and maybe not before the

second half of the year. the market seems to be just fine with that. >> tyler, it took us a long time to get out of the zero interest rate policy, to finally , a place where the fed has restored that. we did not have that for years, so having that ability to have that more normalized interest rate environment is good. i think the tricky part is and this is where chairman powell talked about this and we will find out more in the beige book. it is very much an uneven economic growth. on one side people benefit from the financial assets and how the markets are doing and on the other side the consumer is feeling stretched. now does that spill into wider crises or larger problems? that's what we have to wait and see. we don't think there is a rush to cut, the economy on aggregate is doing well with interest

rates providing a big savings boom to plenty of americans on aggregate the economy is in fine shape. >> as we look at the markets we have a nice rally with the current pace of return 7%. is it sustainable if we assume the fed stairs where they are with the monetary holocene not changing, can we sustain the run? >> we came off 26% return in 2023, last year. 7% if you analyze, 50% returns. can it happen? of course. probable? not likely. 50% return. not likely, given where evaluation is climbing up, the sentiment it is getting bullish. so the market is due for a pause for a little bit of correction. maybe there is all the worries and fears about another regional crisis which triggers that.

but you know if we take a long- term view, 5 to 10 years the trajectory for markets is upward. >> you have specific recommendations with the consumer stretch which i found interesting, we heard from a number of retailers targeting walmart, some smaller like abercrombie today doing well even though shares are under pressure. putting it all together what recommendations might you have going forward? >> we think it is an ideal hunting ground for active strategy because there are plenty of stocks in every sector with a good balance sheet. not a lot of debt, good fundamentals, levered to the big trends in society we think there is a lot of money to be made behind transitioning to clean energy sources. money is being spent by the government on the inflation reduction act. the chips act. 's we have like this eaten, it is a major supplier in the

electrical infrastructure as we transition to a more clean energy source, the products are used in data centers so talk about the ai chip driven boom that we see with a company like eden, they will benefit. >> you would go with that over and video these other. play ai and chp stock names and valuations? >> this is where the opportunities are. we look at a company where we have even a defensive name like sprouts market, looking at double-digit returns in earnings, growth, not a stretched valuation. maybe slight premium to the market, very little debt so you don't have to pile into the household names to get returns, all the names are set up to provide pretty nice compound returns over a number of years. >> putting money in fixed income? >> yes of course. >> because? >> because of the rates,

getting 5%, the money market staying 5%, that interest rate comes back. >> lock into the right now and when they come down the bond or fixed income is worth even more. meantime you collect higher interest. good time to be going there. thank you very much. >> let's get back to steve with some details from the facebook as the tao is higher by 100 points. >> economic activity according to the beige book, collection of economic anecdotal evidence of what's happening in the economy say it increased slightly since early january. eight districts with modest growth, only one of the 12 noted a slight softening in economic activity. may be worrisome, consumers spending down in recent weeks with consumers showing, according to the beige book heightened price sensitivity with households treading down

shifting spending away from discretionary goods according to the report. demand for service, things like restaurants and hotels declined due to elevated pricing. also there may have been weather affect. supply bottleneck normalized further which was good. both red sea and panama canal shipping disruptions were not having a noticeable price impact or supply impact at the time that the beige book was written. pickup in demand in residential real estate was noted although inventories were seen as low. growth outlook remains positive overall with a few other items, employment up at a modest pace, the labor market, the tightness there was some easing further with greater labor availability. price pressure is a key for the federal reserve, persistent, but some moderation was standard inflation, freight insurance costs going up with health costs for the employee portion and something you will appreciate, businesses were finding it harder to pass the

higher cost to the consumer. >> very interesting. that is interesting shifting away from services, we have known about the goods but that was interesting that i would like to dig into more. thank you so much for joining us. coming up, admissions, the sec requiring corporate climate disclosures. we will speak to the chair, next. shark plus, another black eye for the ai space. those details, when we return. welcome to ameriprise. i'm sam morrison. my brother max recommended you. so, my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcía's, love working with you. because the advice we give is personalized, -hey, john reese, jr. -how's your father doing? to help reach your goals with confidence. my sister's told me so much about you. that's why it's more than advice worth listening to.

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let's get to the bond

market reaction to the chairman's testimony and the beige book. now on the trading floor in chicago. >> if we look at what's been going on, the beige book is interesting, what happened with regards to the chairman, he certainly did not push interest rates any igher, but if you want to know the real culprit today for interest rates, flight to safety was the culprit and new york community bank. you can clearly see right before noon interest rate with the big drop, no matter what part of the curve, that's when the news was hitting. looking for capital infusion and if you look at two days, what is fascinating is under yesterday the low we took that out, always significant, build momentum with higher prices, lower yield and we will talk to a traitor and see what the influences were overall today. how are you doing? we had so many moving parts today, what did you ee in the

marketplace starting with the data moving to j powell with any other issues you may have noticed? >> whenever powell will speak it is a chance to be market catalyst. we did not see that today a lot of the numbers they have been in line with rates, today adp jobs number was in line allowing the story of nvidia or meta earnings to dominate the market sentiment and direction. so until powell says something we don't expect he will not be the catalyst. >> benchmark provisions, today was about taking away the 9 million handle of last month. that had some influence, what about new york community bank? they say that was the story, the big input into the buying spree just before noon eastern. >> late spring of last year we had silicon valley bank which expanded to a number of other regions. >> we have breaking news, go back to the studio. >> okay thank you very much.

>> getting back to the latest chapter in the regional banking crisis. to new york community bank where it is march again and a weird feeling. >> definitely a weird feeling but there has been a press release from new york community bank saying they have raised $1 billion from a strategic investor listing liberty strategic capital, that's the firm managed by the former treasury secretary. hudson bay capital reference capital partners citadel securities with other institutional investors making the $1 billion commitment in the company, liberty expected to invest 450 million, hudson bay 250 and reverence $200 million as part of the transaction. they are announcing a new ceo, they say the former comptroller of the currency will be the ceo of this firm and who was just

named ceo recently within the last week or so he will be named nonexecutive chairman and also part of this transaction, we have details about the exact price per share, two dollars per share as they are selling and issuing to investors, common stock at a price of two dollars per share. there is a little bit of complexity involving that, they say the deal is supposed to close on or around march 11th, subject to satisfaction of certain closing conditions and the receipt of revelatory approvals required in connection with the rules of the two even though he does have experience with the occ. so, interesting twist to the story as news, they were seeking out investors sent the stock price limiting 42% today before halted due to the news

pending, now the news is out that new york community bank has secured investment of $1 billion from a select group of private investors here. back to you. >> this is interesting and i don't mean to put you on the spot, but you talked about liberty strategic, but hudson bay with 250 million, that's the company that usually invests in retail real estate right? >> yes, it is interesting. i heard today that the discussions involving capital raise were skewed to private market customers and that was not on my top list of investors to reach out to. the usual suspects participate in these deals, so it is an interesting turn of events to see these investors who are not known for necessarily investing in regional banks and in this manner. given the state of things, a billion-dollar injection of cash

, you have a ceo change as part of it. the secretary taking a seat on the board as well as three others, with some others from hudson bay, and reverence taking a part of this, i believe that stock is still halted. we will see what the investor response is when it resumes trading. >> we had a guest onset talking about the action with new york community bank which she feels is a crisis of confidence which is a little bit frightening if it's not based on fundamentals and people's incompetence in a company. you have been focused on new york community bank specifically, but is there something else or other banks to be watching out for? as this contagion happen sometimes like we saw a year ago? >> confidence is a critical one especially in the banking world when you get a cycle of events

where you have depositors who look at the stock price, the stock price is concerning, they get concerned and take money out, then it feeds on itself. that is not necessarily the case here. i don't believe it is in the press release that came out but we have not seen much of an update to the state of deposit last month. we have no reason to believe they have been running with one of the benefits new york community bank has is that a lot of branches are under different brands like flagstar for example. it is not as easy for people to make the direct comparison that though, it is that the stock price declining, my money is held at the bank and there is a lot of brand differentiation. that said, confidence, if you are a big management team your number one job is to make sure your depositors feel they are confident having money at the bank.

it is important for regulators to fill company in the path forward and this is a company that last week cited material weakness within the internal controls, trading more cloudiness surrounding that companies picture that they are trying to project. that's one of the key reasons why we are seeing such a dramatic decline with more than 80% this year in new york community bank. >> fascinating stuff, thank you, we should clarify for the viewers it is a different hudson bay so apologies for that if we gave confusion, but that is making news and the press release just came out. we had very little details on those investors for the $1 billion infusion. >> the sec votes to approve new climate rules requiring public traded companies to dispose -- to close risks to investors, somewhat watered-down from what was proposed two years ago. here to discuss that and more is

sec chair. now i'm going to get to the climate rules that have just passed recently, but i want to begin with the news involving new york community bank. i wonder what, if any role the sec has in ensuring the soundness of the bank and that the bank is in compliance with all securities regulations and disclosures with respect, for example having to raise more capital. >> tyler, of course i think the viewers would understand me not commenting on any one particular company, but if i can see generally we have a role with regard to public companies and most of the largest banks in the u.s. are public companies. so our role is about disclosures that they make and that they are making disclosures and have copper controls around the disclosures. and i know we will get to climate any moment, but that in

climate is also disclosure based. here, anyone think that is a public company, we have a role with regard to the accounting, the disclosures and controls around those numbers. >> when something like this happens when the bank says we have to come to the public market to raise additional capital, take me inside the sec and tell me what's going on with you and your employees to make sure that all of the disclosures are, do you go to a kind of overdrive here and say we better start looking to see whether they comply with all the disclosures that are required or what happens? you will point me to the news of the day but if i can step back to the news of the day we have a division of corporation finance as hundreds do with disclosure review and they look

at filings and if a company is going public for the first time there is a lot more detailed review of it. if the company is already public and their making filings, then the export staff look at that. we have an office in the disclosure review team that looks at accounting and asks pretty important questions of the issuer about accounting and controls. if you look back because this is public, look back at something like credit suites 2+ years ago our expert staff was really asking, do you have the proper controls around your accounting and as it turns out they did not. >> you have answered my questions. i will move on to climate change rules that i gathered in the past within the last couple of hours. educate me here, are these rules, do they apply to the risks that companies may face from the effects of climate

change or the risks that the companies pose in doing business is to the climate? >> securities and exchange commission is merit neutral, we are agnostic with regard to climate risk itself. we do have a role to play about disclosures made by companies. so the rules that we adopted today are about the first of what ou said about investors making investment decisions and what risk it poses to investors and it is grounded in materiality, a multi-decade old concept where companies disclose that which a reasonable investor would consider amongst the total mix of information and making an investment decision or voting, not about the climate itself. >> so these will be rules presumably that apply to all

companies, no matter what sector they operate in. so there is some standard in the way in which the information will be reported in released? >> it only applies to public companies or companies going public. but it is all the companies and we did take a layered or tailored approach as it relates to one metric, greenhouse gas metrics that only applies to the larger companies the so- called large accelerated and accelerated filing. just even today if one looks at the top thousand companies in the markets, approximately 60% of them are already making information about greenhouse gas emissions public. this rule today brings more consistency and reliability to that which companies are already doing.

>> i understand some believe these rules add additional burdens to public companies that already have the report all sorts of other information so what is your argument for that? >> investors are making decision based on the information that many hundreds and hundreds of companies are already releasing information about how they manage greenhouse gas, how they manage climate risk, companies are also often utting out targets and goals. this will make that information more reliable for investors, but also for the issuers, they will have something in the u.s. based on our laws and our markets that they can look to and say this is the rule that we can make these disclosures. again, that which is material to the investors. >> let's talk about what are known as, the scope three

regulations explain what those are and why those were not included, they were the most controversial part of some proposed rules in the past so why were they not part of this end result? >> many companies today, public companies put out information about greenhouse gas emissions that they have where they are purchased energy. this is scope one and two. but, fewer company, still significant numbers put out what they estimate and is generally estimates of the greenhouse gas emissions of what's called the value chain, suppliers on the one hand, consumers on the other. when we propose something there, we took a layered

approach but we got a lot of comments about it from the agricultural community, from small and medium-sized enterprises. from many nonpublic companies and said look, even for a public company to make estimates, they may have to start asking questions of the private companies. you know, a former or a rancher in montana. so we look at the comment file and we look at the economics and we decided, though, investors are looking at the information, at this time we would not include that in any formal role. >> let me ask one more thing as pointed out this affects a lot of companies across a lot of sectors. i can well imagine that some companies in some sectors would have relatively small disclosures to make in this regard.

and others in different sectors would have large, voluminous scores, hundreds of pages with the disclosures so what do you think these rules are going to hit hardest? >> i'm not sure anybody will have hundreds of pages, but i agree with you, for many companies, they determine climate risk is not material to the investors, then they have very small to minimum disclosures. on the other hand, if they suffer a severe weather event that is significant to the financials, they would break that out in a footnote to the financials. if they are one of the larger companies and they determined that it is material to the investors to have some disclosures around greenhouse gas emissions, they would have some disclosure, as well, but

the requirements are there, grounded in is it material to investors and secondly it is about companies that make targets and goals and if they are making a target and goal that they manage their own greenhouse gas emissions, or manage their suppliers and the greenhouse gas emissions that how are they managing toward their own targeted goal again if it is a material, that's the context. , as you said there is some sector where management will determine material. there are already literally hundreds of companies that are making information available and now we will bring some regularity, but i would say consistency and reliability to those disclosures and i think it will help limit and guard against greenwashing. companies bragging about

something that may not actually be valid. >> very interesting. always good to see you, thank you so much. >> thank you. >> thank you for taking my questions and artfully answering them. >> further ahead on the show in what was supposed to be a windfall for the you can't -- u.s. government taxpayers are paying $1 million a month to maintain a russian yacht. more on that, when we return.

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let's get over for a market flash on pfizer. >> pfizer in the news after a federal appeals court ruled in favor with regard to a lawsuit brought by a conservative leaning nonprofit group called do no harm brought back in 2022, the lawsuit challenged a pfizer funded fellowship program designed to help boost the number of black, hispanic and native american people who could attain leadership positions at the committee. the appellate court rules the organization lacked legal standing to challenge the fellowship program due to its inability to identify any party

in particular that was harmed by pfizer's alleged discriminatory practices, pfizer did issue a statement praising the ruling saying it is an equal opportunity employer and proud of its commitment to diversity equity and inclusion. worth noting pfizer shares did not make these headlines but shares have been bouncing higher after roughly hitting 11 year lows in monday's training session. >> got it, thank you very much. shares are up 4%, let's get over to our cnbc news update at this hour. >> supreme court will hear former preisdent trump's presidential immunity argument next month. the high court says it will consider whether he can be criminally prosecuted for his alleged efforts to return the 2020 election, trump has argued that presidents should have total immunity, arguments on the matter is scheduled for april 25th, decision is expected by the end of june.

presidential field shrinking this afternoon, minnesota representative dean phillips endorsed president biden as he ended a longshot bid for the white house today. it came hours after former un ambassador nikki haley exited the race after losing all but one state in super tuesday, the nominating contest. the average credit score just fell for the first time in a decade. according to a phi cove report it ended down one point it ended down 1.717 after hitting a all-time high of 718. the average nationwide score bottomed out at 686 back in 2009 during the housing crisis climbing steadily over the last decade and then rising to the new high during the covid-19 pandemic. which was fueled by government stimulus, in part,

and a spike in household savings. still pretty healthy. >> yes, pretty good. coming up, growing for ai, first we had he google software delivering problematic results, now the same at microsoft. we will brg yoinu that story. when i'm not selling hot dogs, i invest in a fund that advances innovations like robotics. fresh, warm hot dogs, straight out of my torso! one for you, one for you. oh, you're a messy one. cool, right? so cool. anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. hot dogs! fresh, warm hot dogs! before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

another example of ai gone wrong, microsoft ai image generator creates violent and sexual images as well as ignoring copyrights. the story was written and we spoke with the engineer making the issues public, she now joins us on site along with our technology reporter. if you ive me a little bit of a rundown for the viewers have not been able to get to the full story about what happened with microsoft. >> it is a crazy story, this weekend i heard from a microsoft ai engineer who was concerned about what he was finding in the copilot tool. he had been testing for months and he said all the violent and sexualized, crazy images it had been generating, he reported to microsoft over the last three months to no avail.

he was not happy with how they had been handling the reports. the crazy part is that i myself was able to re-create the same images he was concerned about yesterday. violence, sexualized, inappropriate images, think, kids with guns, demons and monsters next to abortion rights terminology, women in car accidents, stuff you don't want to see from a ai image generator. >> that goes to some of my questions. what are users potentially typing in with images? are they tapping exactly those descriptions or something else that generates something that does not match what they're looking for? >> a little bit of both but i was surprised at how simple the prompt could be. if i type car accident that's when those images popped up, just the term car accident. >> why does that happen? >> the training data that the ai is trained on, to basically be able to do its job can be

pretty nasty. it is trained on the whole internet and sometimes the people training these tools do not cut out toxic content when it goes to the ai model. basically what goes in must come out and we see that here. >> so i could sit in or put in what would be an innocuous phrase, children at play and i could get out a child predatory image potentially? not saying that's what happened. >> absolutely. there is no rhyme or reason, sometimes it happens and sometimes it doesn't and even if you ask for problematic images it will return them. the guardrails in place, they may be failing, even copyright infringement. i saw snow white on a vague. >> obviously google and thunder which we have talked about the failings when it comes to gemini what do we know from microsoft?

what are they doing if we can find those images? >> we know that google pulled down the tool, microsoft is not saying that, they just say they are looking into it, but what stuck out to me as the engineer, his entire job, he is on the red team. his job is to find problems like this, flag internally and say we need to fix this, it's a problem. he allegedly did that, he says i did that, i went to the proper channels and his superiors said no. to the point where he felt he had to go to the press where he had to write a letter to the ftc, to microsoft and this reminds me where we were 12 to 15 months ago t the birth of the ai revolution that we are in the middle of with all companies, google and everyone saying we will do this deliberately, be safe. even more recently talking about how they will protect election integrity. when they cannot do their own

systems and police themselves, why should we trust them? it creates an immediate lack of trust when you know the internal systems are failing and also saying, we will embrace relation, but regulators have no appetite to do anything about it. so they get to do what they want. >> it seems wacky that microsoft is coming up with a similar problem, with gemini it sounds like it was flagged, nothing was done. how hard is it to retrain ai? >> well, not how do you fix it, leave me that's a problem above my head, but also, you know they are towing the line. this is similar to what happened with google a couple weeks ago, but different because google put too many guardrails in order to be overly cautious, that's the way they framed it. politically solicitous, some people call it woke.

this is the opposite with no guardrails or they are there and not working, i tried some of the same things and sometimes it worked and sometimes it said i cannot do that image. so it is sort of working imperfectly and again if it is flagged internally with nothing being done or people are told basically to be quiet that is not a good look for microsoft who from the beginning said we will be responsible, we will get this right and if they are not doing it internally, they have to look at their own systems for reporting and figure it out when someone flags the issue. >> there is a lot of division. a bigger problem than the ai. >> something you said a moment ago. when you did a spot check over the weekend and you put in the search engine, images of car accidents, you got back, created, not actual, but created ai images that included

sexualized images of women in car accidents correct? >> yes or near. some time sitting on the hood of the car or kneeling next to the car. in lingerie. very problematic. the other interesting thing is that this app, copilot is rated e for everyone in the android app store. >> but it is 17 plus in the apple store. >> thank you you very much. >> let's talk about new york community bank shares resuming trading, jumping higher, now halted for volatility after getting a cash infusion of more than $1 billion from a consortium, including the company run by former treasury secretary. "power lunch" will be right back.

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lunch". it is time for today's three stock lunch, hope you are hungry. names making big rooms after earnings. here is the cic wealth management executive and cnbc contributor. first up, crowd strike. the crowd is down 11%, after providing a first quarter forecast. what is your take on crowdstrike? >> so, this is actually my favorite sector right now in all of the market. i am just curious, it is a nondiscretionary expense, regardless of the size of the company. worldwide spending on security and risk management solutions is expected to be up something like 14% this year over last year and that is not what it looks like for government agencies around the world. with crowdstrike being one of the two largest players in that space, i love his name right now, even after earnings. >> let's move on, to footlocker

shares. they are tumbling after the company reported a holiday quarter loss. for the current year ome in the midst of a turnaround, just delayed its profitability goal by another two years. i would look at some of the data here and go, bye-bye. >> yeah. i think the selloff in this one is a little bit overblown, if you just consider the shares have already been beaten down significantly since about june of last year. the company has plans to move away from its dependence on malls and focus on a new set of commitment ships that they have, which is the reason why guidance has been so light. plus, they have plans to expand into asia with the partnership with the nba. or, parts of asia, i should say. with shares being down more than 45% now, over the one-year period, i think this really looks like an attractive buying

opportunity for anyone who is interested, who has been interested in this name for a while. >> what is the concept that is going to move them away from mall focus? what is it? >> they are turning to other partners that already have distribution to carrier products, like partnering with the nba, for example. potentially, the idea selling shoes at stadiums and there can be nba activations and stuff like that. it gets their product out there without having to have the brick and mortar focus, or the mall focus. >> gotcha. >> i understand it will take them a couple more years to get to the plan, i think that is what drove the stock lower initially. finally, we do have nordstrom. despite beating analysts on the top and bottom line, 16% today, a muted outlook for 2024. they are not alone, though, malcolm. a lot of companies are sort of worried about the consumer and response. what is your take on nordstrom here? >> so, i consider this one hold. i don't think it is time to go buying this dip, but i don't think it is a screaming sale,

either. we were talking about footlocker, these guys are all focused and we know the challenges department stores are up against with more people working from home, permanently, and even those going back, places have shifted to a less formal wardrobe policy, which impacts what nordstrom customers are buying. with that, nordstrom has managed to return to pre- pandemic revenue numbers, which i think is important. i don't feel good about dependency on mall retail, but i don't think you necessarily have to go dumping those shares today, either. >> fair enough. nordstrom shares down 16% if you are following that one. malcolm, thank you for being left -- with us for three stock he et weavmore "power lunch", next.

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welcome back to "power lunch". u.s. taxpayers are paying $1 million a month to maintain a yacht seized from a russian oligarch. russian -- robert frank is here with the story. >> unless you are a u.s. taxpayer, of course. two years ago, u.s. marshals commandeered the 48 foot yacht in fiji. the government said it is owned by a sanctioned russian billionaire who made his fortune in mining.

the marshals sailed into san diego and began forfeiture proceedings to take possession and hopefully sell it. it is all part of that global dragnet to capture the yachts, mentions, of those russian oligarchs, use the cash to fund ukraine's war effort. it turns out, it wasn't that simple. oligarchs are masters at hiding their ownership through shell companies and straw owners. attorneys for a non-sanctioned russian billionaire said, he, in fact, is the owner. u.s. said he is a proxy owner, and emails from the yacht crew prove that karimov is the real owner. meantime, u.s. government and taxpayers must pay maintenance on that boat as it sits in san diego. that totals nearly $1 million a month. it includes $360,000 a month for crew, $75,000 for fuel, $165,000 for food, waste removal, other expenses.

you have to ensure that boat, so that is included, as well as drydock repair. so far, u.s. has spent over $20 million. the u.s. said the yacht is valued over $230 million, and says that the fees are excessive to the u.s. taxpayer. i would agree. >> i'm so confused. why are we paying for food? why are we paying to maintain it? can you drydock the thing? >> drydock is even more expensive than it sitting in the water. yachts, no surprise, are very expensive. even if you are just sitting there, you have to wash t, clean it, maintained the engines, that crew of 10, 12, 15 people, which is still a skeleton crew to maintain a 300 plus foot yacht is necessary to retain its value, because the u.s. wants that money to give to ukraine, so they don't want to destroy the value of the yacht. >> if there is an ownership

dispute, who has the title to this thing, that could slow any kind of sale. >> the u.s. wants to sell it now, put the money in escrow, and then fight over that escrow. so at least, yes, they won't get the money, but at least we won't have to be paying $1 million a month to maintain it. so, you are right, the actual proceeds could take months or years to actually receive and get to ukraine or whatever the u.s. ends up doing with it. >> we have got to give away $1 billion to med schools -- forget the yachts. >> i was a great story. >> all right, thanks, robert. and thank you, for watching "power lunch". >> "closing bell" starts right now. welcome to "closing bell", item scott walker, live from the new york stock exchange. this make or break our begins with three big stories on our radar this hour. turmoil at new york community bank. shares plunging as it races to raise new capital. this happened multiple times today. that story continuing to develop. we have the very latest coming up. fed chair jerome powell on the hill before the house financial services committee with a more dumpy stone than folks expected